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Marketing: Products (Goods and Services) (Chp. 6)
Products: Goods and Services
Terms in this set (15)
What is a product?
Goods and services, a central offering in the marketing exchange between a customer and a company.
What do we mean by product?
Something that the company believes will benefit its customers.
What is the "marketing exchange?"
Company offering somethings (e.g. hotel room) in exchange for something in return (e.g. payment). Each party seeks something of value, and a trade is initiated.
How are goods different than services?
While they share similarities, services are more (i) intangible (ii) inseparable (iii) perishable (iv) variable
Define intangibility (in the context of goods vs. services)
"Goods are tangible, because you have something at the end.
Concerts are intangible, because you don't get something material.
What is the intangibility index?
Defined as the ratio of R&D to capital spending. High for software and RX companies, low for oil companies, consumer packaged goods, and computer hardware manufacturers.
Define search, experience, credence (in the context of goods vs. services)
"(i) search: attributes that can be evaluated before purchase
(ii) experience: attributes that need some trial or consumption before evaluation (e.g. recommended restaurant)
(iii) credence: attributes that are difficult to judge even post-consumption (e.g. therapy, vasectomy)
Define perishability (in the context of goods vs. services)
"(i) in context of marketing, can services be inventoried?
(ii) the inseparability of production and consumption for services leads to services being perishable
(iii) for example, a tax consultant can't ""book"" time spent twiddling thumbs in August to be used in April.
Define variability (in the context of goods vs. services)
"(i) goods tend to have a reliable and consistent product
(ii) services can vary (e.g. good concert, bad haircut)
(iii) service variability can be reduced by introducing self-service via machines (e.g. airport kiosk)
What are the core elements of the firm's market offering?
"(i) the core: central element of what is purchased, which defines the company to its target segments (e.g. car in the purchase)
(ii) value-addeds: enhances customer satisfaction (e.g. services at dealer like financing, service plan, friendly staff, image, coffee)
How does the product definition help us to identify competition?
"(i) The continuum of competition is very large and can be drilled down.
(ii) Choosing what you define as your competition helps frame your actions.
(iii) For example, a Prius competes with (a) other hybrids (b) other cars (c) other means of transportation
Define dynamic strategies (in terms of core market offering)
Core businesses change as industries change or a firm's competencies change (e.g. Victoria Secret pivoting from 70% apparel to 70% beauty and fragrance lines).
Define product lines: breadth and depth (in terms of core market offering)
"(i) Breadth: the various product lines offered (e.g. hair care, frozen treats, automotive)
(ii) Depth: the degree to which subservices of ""hair care"" are provided... or how well we do this kind of service.
How do core vs. value-adds score points in the customer's eyes?
"(i) core elements do not generally score points in customer's eyes, but they can lose points (e.g. car is frequently recalled)
(ii) value-adds can score or lose points (e.g. better service package for car)
What is a services flowchart?
A chart that maps each part of the service encounter, delineating between those that are "on stage" (customer facing) vs. behind the scenes. Generally KPIs are developed for elements of the flowchart.
Sets with similar terms
Strategic Marketing Chapter 6
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Chapter 1: Introduction to Services
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